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2023 (10) TMI 1088 - AT - Service TaxLevy of Service Tax - construction of residential complex service - amounts received from Tamil Nadu Police Housing Corporation for the construction activities carried out by the appellant - period 2005-2006 as well as 2007-2008 to 2009-2010 - HELD THAT - The Tribunal in the case of K. ELANGO PACKIARAJ VERSUS COMMISSIONER OF CENTRAL EXCISE, MADURAI 2020 (2) TMI 291 - CESTAT CHENNAI has considered a similar issue and held that the demand cannot sustain. In COMMISSIONER OF CENTRAL EXCISE SERVICE TAX CUSTOMS, BANGALORE-II VERSUS NITHESH ESTATES LTD., 2018 (7) TMI 1135 - KARNATAKA HIGH COURT , it was held that the demand under Construction of Residential Complex services cannot sustain, when ultimate owner receives the property for personal use. The Tribunal in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI held that the demand of service tax under Construction of Residential Complex Service cannot sustain when the nature of construction activities rendered are of composite contracts involving both materials and labour. The said decision was followed in JM/S. JAIN HOUSING CONSTRUCTION LIMITED VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI 2023 (2) TMI 1044 - CESTAT CHENNAI . Thus, the demand for the subsequent period 2007-2008 to 2009-2010 also cannot sustain and requires to be set aside - appeal allowed.
Issues Involved:
1. Liability to pay Service Tax on construction activities for Tamil Nadu Police Housing Corporation. 2. Applicability of Service Tax for the period prior to 01.06.2007. 3. Definition and scope of 'Construction of Residential Complex' services for the period 2007-2008 to 2009-2010. Summary: Issue 1: Liability to pay Service Tax on construction activities for Tamil Nadu Police Housing Corporation The appellant, engaged in 'Construction of Residential Complex' for Tamil Nadu Police Housing Corporation, was issued Show Cause Notices for the period 2005-2006 and 2007-2008 to 2009-2010, proposing to demand Service Tax along with interest and penalties. The original authority confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant contested this before the Tribunal. Issue 2: Applicability of Service Tax for the period prior to 01.06.2007 For the period prior to 01.06.2007, the Tribunal referenced the Hon'ble Supreme Court decision in Commissioner of Central Excise and Customs, Kerala v. M/s. Larsen & Toubro Ltd. [2015 (39) S.T.R. 913 (S.C.)], which held that Service Tax on composite construction activities (involving both materials and services) cannot be levied prior to this date. Consequently, the demand for this period was set aside. Issue 3: Definition and scope of 'Construction of Residential Complex' services for the period 2007-2008 to 2009-2010 For the period 2007-2008 to 2009-2010, it was argued that the construction services provided to Tamil Nadu Police Housing Corporation were intended for the residential use of police personnel. The Tribunal examined the definition under Section 65(91a) of the Finance Act, 1944, which excludes complexes intended for personal use. The Tribunal cited several decisions, including K. Elango Packiaraj Vs. Commissioner of Central Excise, Madurai [2020 (2) TMI 291-CESTAT CHENNAI] and Siva Engineering Company Vs. Commissioner of GST and Central Excise Coimbatore [2019(2) TMI 87-CESTAT CHENNAI], which supported the appellant's stance that such activities do not fall under the taxable category of 'Construction of Residential Complex' services. Therefore, the demand for this period was also set aside. Conclusion: The Tribunal set aside the impugned orders and allowed the appeals with consequential reliefs, if any.
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